It is all about demographics

Transcription

1 You Can t Manage What You Can t Measure! Terry Glasscock, Senior Project Consultant Cindy Barr, Senior Project Consultant TCPA CEO/CFO Meeting May 17, It is all about demographics that are working against us. 2 1

2 Demographically driven economic influences by the... Baby Boomers! 3 Number of Workers Per Retiree

3 Federal Receipts vs. Entitlements Baseline SS, Medicare, and Medicaid Baseline receipts (includes JGTRRA) 5 Social Security, Medicare & Medicaid Outlays as a Percentage of GDP Medicaid Medicare Social Security Source: C. Eugene Steurle and Adam Carasso, (Budget Crisis at the Door), The Urban Institute, Based on data from the Congressional Budget Office, A 125Year Picture of the Federal Government s Share of the Economy, , July 3, 2002, table

4 Just a little history to help us understand why things are changing so dramatically. 7 Aging baby boomers are going to change healthcare drastically and, if you are going to survive, you need to understand why and how. 8 4

5 What Should We Know About the Baby Boomers? There are more of them. They will live much longer. But the overwhelming influence is that they have profoundly different life experiences and values. Why? Because society was completely transformed in one generation. 9 What Transformed Society So Quickly & Why Is It Important? 1. Great depression No money No buying 2. WWII Earnings went unspent unprecedented industrial build-up and Women in the workplace 10 5

6 After WWII Huge production capability Pent-up consumer spending And LOTS OF BABIES (targetable market) And Television Major Socio-Economic Shift Prior to WWII - Production for needs Post WWII - Production of needs 12 6

7 What About Shoes? 70% of all shoes sold are athletic shoes Less than 1/2 of 1% of people who wear them are athletes 13 The MOONRIDERS Many of the current generation of elderly began life riding a horse 1930s - CHARACTER OF MODERN AMERICA 1940s - WWII the conscience of modern America 1950s - FAMILY PARADIGM 1960s - CIVIL RIGHTS REFORM and Placed 12 men on the moon 14 7

8 The Baby Boomers In 1958 I was 10 Hoola Hoops, Fizzies In 1964 I turned 16. MUSTANG CONVERTIBLES. Then I went off to college THE PILL. Then, when I turned 50 VIAGRA. 15 Boomers More of us live much longer healthy woman over 50? Everything we ever wanted was there before we knew we wanted it! Wants have become needs Needs have become expectations Expectations have become demands In other words we ve got an attitude! 16 8

9 So what? Congress own Commission on Entitlement Reform reported that SS, Medicare, Medicaid and interest on the national debt will exceed all federal income by 2030! By /3 of voters will be at or near retirement age 17 International Monetary Fund The United States must either decrease benefits for Medicare and Medicaid by 50% or increase taxes by 60% to maintain solvency of those programs. 18 9

10 So, We Must Learn to Manage Both Strategically and Tactically 19 Becoming more productive and efficient is essential. But How? 20 10

11 Managing with Metrics Is simply 21 Acquiring Management Wisdom 22 11

12 The Process Measuring to create Data Comparing to create Information Benchmark to create Knowledge 23 The Process Evaluating to create Wisdom Moving on to Action 24 12

13 Measure Gathering Data: What Should You Measure? 25 Process of Measure Measure inputs Measure activities Measure outputs Measure outcomes 26 13

14 Measuring Inputs Inputs - Human and Physical Hours worked, number of specified FTEs, examination rooms, phone calls answered, supplies, physical space, and equipment (i.e., MRI, x-ray, and lab) - Financial Salaries, equipment lease, overhead costs per square foot, and contract services 27 Measuring Activities Program Activities are what the program does with the resources. Activities are the processes, tools, events, technology, and actions that are an intentional part of the program implementation. These interventions are used to bring about the intended program changes or results. All functions of the organization operational, clinical, financial. Scheduling, intake, examination times, recording time

15 Measuring Outputs Outputs - Physical Number of visits or encounters, patients, prescriptions, cases, X-rays, lab work, referrals made, etc. - Patient and Staff Satisfaction - Financial patient revenues, Net Margin 29 Outputs Capacity Metric: Billable Encounters - How many slots do we have? - How many slots are filled? - How many slots were used? - How can we get more slots? - How can we get more slots used? - Can we get more kinds of slots? Encounters = Revenue = Sustainability 30 15

16 Outputs Capacity Defined Persons Served Costs Incurred - How many persons can we commit to manage? - How many persons have received some care? - How many persons identify us as their MH? - How many persons were managed by each team and at what cost? 31 Measuring Data Service Provider: FTEs Physician 8.57 Midlevel (PA, NP) 11 Nurses (RN) 8.34 Medical Provider Support* Dental Provider 5.34 Hygienist 8.11 Dental Support Clerical and Administration Facilities 1.48 Enabling 7.81 TOTAL Visits Medical Visits 52,483 Dental Visits 31,297 Mental Health Visits 0 Total Visits 83,

17 How Do We Convert Data to Information? 33 Comparing Comparing Related Data Creates Information 34 17

18 Creating Information Simple Ratios Create Information - Visits/Provider - Cost/visit - Net Margin - Debt/Equity 35 Comparison Begins to Provide Meaning Comparison Ratio Total Visits / Total FTEs 554 Med Visits / Provider 2682 Dental Visits / Dental Provider

19 Comparison of Your Own Data Leads to Benchmarking Users-Visits Average User Growth Rate 4.16% 5.39% 16.37% 8.64% Visit Growth Rate 5.95% 16.74% 23.86% 15.52% NPSR Growth Rate 33.4% 14.80% 60.00% 36.07% Not so for others Users-Visits Average User Growth Rate -3.76% -7.10% -5.43% Visit Growth Rate -2.06% -8.77% -5.42% NPSR Growth Rate % -6.00% -8.40% Users-Visits Average User Growth Rate -4.01% 3.45% -0.28% Visit Growth Rate -6.16% 12.04% 2.94% NPSR Growth Rate 32.80% -3.90% 14.45% 37 Benchmarking Turning Information into Knowledge 38 19

20 Benchmarking: Assessing Results Against Yourself Budget to Actuals Period to Period Trending Against Your Peers Local, Regional, State, National Clinic Type, Size, Location Against Industry Standards Industry Guidelines 39 Beyond the Budget Measuring and benchmarking goes beyond the budget beyond financial Financial measures should be benchmarked Operational measures will be benchmarked And, there are some measures and benchmarks that are a combination. If a measure has a $ in front of it is financial; if it doesn t it is usually operational Let s look at some examples 40 20

21 Benchmarking to Yourself Year Service Provider: FTEs FTEs Physician Midlevel (PA, NP) Nurses (RN) Medical Provider Support* Dental Provider Hygienist Dental Support Mental Health Provider 0.33 Clerical and Administration Facilities Enabling Admin Enabling 2 TOTAL Year Med Visits / Provider 2,682 2,300 Dental Visits / Dental Provider 2,327 2,319 You re learning more; information is becoming knowledge 41 Benchmarking to Yourself Personnel Expense to Total Operating Revenue 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 82% 73% 60% 64% 65% 6/30/2010 6/30/2011 6/30/2012 6/30/2013 6/30/

22 Benchmarking to Peers Derived from data base of over 80% of FQHCs Show years Sorted to show - 75 percentile - 50 percentile - 25 percentile Pencil in your own performance 43 Liquidity: Days Cash on Hand Unrestricted Cash (Total Operating Expenses Depreciation) 360 Days) Measures Liquidity The number of days an organization can operate without any new cash inflows Recommended Benchmark Maintain Days Cash on Hand at least 60 days at minimum. Stretch goal: 90 days 44 22

23 Days Cash on Hand National Averages th Percentile 50th Percentile 75th Percentile Liquidity: Days in All Accounts Receivable All Receivables NPSR + G&C Receivables + Net Assets Released from Restrictions/ 360 Days Measures Liquidity The average number of days it takes the health center to turn all its receivables into cash Capital Link s Recommended Benchmark Goal is to keep this ratio low! Maintain All Receivables turn under 60 days 46 23

24 Days Net Patient Receivables National Averages th Percentile 50th Percentile 75th Percentile 47 Operating Margin Measures Profitability Change in Net Operating Assets Total Operating Revenue The percentage of operating revenue that the health center retains as profit (or loses) from operations. Capital Link s Recommended Benchmark Maintain Operating Margin at 3% or higher. The higher the margin, the stronger the financial performance

25 Operating Margin National Averages 8% 6% 4% 2% 0% -2% -4% th Percentile 50th Percentile 75th Percentile 49 Bottom Line Margin Measures Profitability Change in Net Assets Total Operating Revenue The percentage of operating revenue that the health center retains as profit (or loses) from all business activities. Recommended Benchmark Maintain Bottom Line Margin at 3 to 5% or higher. The higher the margin, the stronger the financial performance

26 Bottom Line Margin National Averages 12% 10% 8% 6% 4% 2% 0% -2% th Percentile 50th Percentile 75th Percentile 51 Benchmarking Trends: Let s look at some national trends 52 26

27 Net Patient Service Revenue Growth Rate 25% 20% 15% 10% 5% 0% -5% th Percentile 50th Percentile 75th Percentile 53 Operating Expense Growth Rate 16% 14% 12% 10% 8% 6% 4% 2% 0% th Percentile 50th Percentile 75th Percentile 54 27

28 Operating Revenue per Visit $300 $250 $200 $150 $100 $50 $ th Percentile 50th Percentile 75th Percentile 55 Operating Expense per Visit $300 $250 $200 $150 $100 $50 $ th Percentile 50th Percentile 75th Percentile 56 28

29 Net Patient Service Revenue per Patient $700 $600 $500 $400 $300 $200 $100 $ th Percentile 50th Percentile 75th Percentile 57 Operating Expense per Patient $1,200 $1,000 $800 $600 $400 $200 $ th Percentile 50th Percentile 75th Percentile 58 29

30 Evaluating Before Changing Converting Knowledge to Wisdom 59 Learning What To Do Much information is easy to interpret once you ve completed benchmarking. Some improvement choices are obvious. Don t focus yet on what to do, focus on what the results are telling you. Consider multiple causes for the information

31 Evaluating: Breaking Good Start by evaluating what you do well. Why do you perform well? - Inputs, outputs, systems? Are your performance causes exportable to any of your less effective systems? Which sites are doing better? What would have to change? Xerox 61 Getting to Dashboards Metrics at a glance 62 31

32 Financial Dashboard: La Clínica 63 Taking Action Learning to Manage Strategically 64 32

33 Strategic Management Requires Strategic Planning 65 Key Strategic Planning Components Mission and Values Who are we? What do we want to be? Are we ready? Self- Assessment Environmental Scan What conditions are affecting us now? What about the future? What are our possible futures? How might these futures impact us? Impact Evaluation Goal Setting What must we achieve for success? What are the steps to take? Measures of success? Action Plan Mission Reaffirmation and Sustainability 66 33

34 Contact Us Main Office Massachusetts Allison Coleman Chief Executive Officer Susan Petrie Chief Operating Officer Tel: Steve Rubman Director of Data & Information Systems Tel: Dan Woodman Project Consultant Tel: Regional Offices California Dale Johnson Project Consultant Tel: Tony Skapinsky Project Consultant Tel: Colorado Jonathan Chapman Tel: Director of CHC Advisory Services Missouri Mark Lurtz Senior Director of Partnership Development Tel: Rhode Island Rebecca Polan Project Consultant Tel: South Carolina Terry Glasscock Senior Project Consultant Tel: West Virginia Cindy Barr Operations & Facilities Planner Tel: Visit us Online: Learn more about our products and services Download our free publications and resources Register for upcoming webinars Sign up for our e-newsletter, Capital Ink Subscribe to our blog at capitallinksblog.blogspot.com 68 34